Global business too important to be left to business people

Just as war is too important to be left to generals, business is too important to be left to chief executives. Global business needs to be regulated to work in the interests of people, especially poor people. The British government, together with officials in the World Trade Organisation and business itself, fail to understand this.

Underlying three current, headline-making stories - the price of Aids drugs in developing countries, child slavery in West Africa and foreign oil companies' investments in Tibet and Sudan - is the same question: how to make business work for rather than against the poor.

This is the question that the WTO has been set up to avoid. Regulation of business is not on the agenda of its next major meeting, in November. Neither is it on the British government's agenda. Instead, the government puts its faith in companies adopting voluntary codes of conduct. But, left to their own devices, companies are simply profit-generating machines. Often, only government action or intense public pressure make big business change behaviour. Indeed, it is only the international campaign against the pharmaceutical companies that has forced them to offer drugs to developing countries at lower prices.

But the governments of wealthy countries, while prescribing an economic medicine for the world, often called "liberalisation", are, in fact, more interested in promoting protectionism for their own companies. The patenting laws surrounding the scandal of Aids treatments - enabling companies to secure monopoly rights over life-saving drugs - are a case of massive corporate protectionism at the expense of the poor.

Those governments, including Britain's, also seek to reshape WTO rules to enable their companies to break into developing world markets previously denied to them. The developing countries themselves are pressed to eliminate trade barriers, which can lead to local producers being undermined by cheaper imports.

Developing countries are also being pressed to accord the same treatment - in trade, investment and procurement - to multinational companies as to domestic firms. Such "equal treatment" in WTO parlance really means favoured treatment for multinationals. A recent report by Unctad, the UN's trade body, showed that foreign investment can have a positive impact on the poor only if it is regulated. If it is not, foreign investment tends to drive out local investors.

Many successful development policies pursued in the past are now illegal under WTO rules. Global rules need to be flexible enough to allow the governments of poorer countries, in dire need of development, powers to regulate the activities of foreign companies. But, as the UN's Development Programme has said, business "needs to be brought within the frame of global governance, not just the patchwork of national laws, rules and regulations". Christian Aid would like to see the introduction of a global regulation authority to monitor and report on global business activities, give voice to communities affected by those activities, and to provide an enforcement mechanism. This would ensure that business is no longer beyond the law and complies with international human rights standards.